The USDCNY exchange rate could see movement on the latest Trump tariff announcements.
USDCNY – Weekly Chart
The price of the USDCNY exchange rate has hit a resistance block at 7.328 and there is potential to revert back to the 7.087 level.
US President Donald Trump has clarified the tariff confusion by announcing export taxes on China, Canada and Mexico. The week ahead could see some exchange rate volatility as all countries have vowed to respond.
Trump told journalists that a levy of 25% on Canadian and Mexican imports and an additional 10% tax on Chinese goods would come into force on Tuesday. Canadian energy firms will face a lower 10% tariff.
Trump said his actions were led by a desire to control illegal immigration and drug trafficking. Canada and Mexico said they were preparing their own tariffs on US exports, while China added it would take “necessary countermeasures to defend its legitimate rights and interests”.
China has previously said that there are no winners in a trade war but they have been forced to respond. That is a worry when the economy has been struggling but it is interesting that the USD is lower against the Chinese yuan after the tariff announcement.
Trump has warned Americans that they can expect “some pain” from tariffs and there are threats to the global economic order. Economists have warned that import taxes by the US and other countries, could lead to price rises on a wide range of products, from cars, wood, and steel to food and alcohol.
